Executive Health: If the boss gets COVID, don’t keep it quiet

It’s enough of a concern for businesses in the Boulder Valley and Northern Colorado when an employee comes down with the coronavirus. But what happens when the boss does?

Fortunately, few companies in the region have had to deal with that issue, but business advisers are fairly unanimous in contending that, when it happens, transparency is the best policy — especially for publicly traded firms.

For instance, when Teresa Elder, chief executive of Englewood-based WOW! Internet, was admitted to a Denver hospital in March after testing positive for COVID-19, the company announced it in a news release two days later.

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Jackie Liu, who co-chairs Morrison & Foerster’s global corporate department and who has counseled public companies for two decades about what information should be revealed to regulators such as the U.S. Securities and Exchange Commission, told ComplianceWeek.com in March that boards of directors should “err on the side of over-disclosure” when a CEO or other top executive contracts the virus. “It’s difficult to argue that is not material,” she said.

In fact, several publicly traded firms have delayed their earnings reports because their CEOs either contracted the virus or entered quarantine. That makes sense, Liu said, because it might otherwise be hard to explain the CEO’s absence during an earnings call.

They also should provide public updates about how the infected executive is doing, said Peter Cohan, a professor of strategy and entrepreneurship at Babson College in Wellesley, Massachusetts. “Companies are holding onto market-moving information that they should disclose to investors so they can make informed decisions,” he told ComplianceWeek. “Absent such disclosure, the board ought to be liable for any insider trading that occurs as a result of a failure to disclose the information.”

Apple tried to conceal the health conditions of its chief, Steve Jobs, before he died in 2011, and paid the price with adverse public relations and an SEC inquiry. “You don’t want to lose the P.R. battle that the company hid this,” said Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School, in an interview with The New York Times.

“Radical transparency” also was the order of the day for Cedric François, co-founder and CEO of Apellis Pharmaceuticals in Louisville, Kentucky, who informed his board of directors immediately when he found out in March that he had tested positive for SARS-CoV-2, the virus that causes COVID-19. 

“For four days, I was sicker than I had ever been,” he wrote in an essay. “I was hurting terribly in every part of my body. I completely lost my sense of taste and smell. And then, as suddenly as it came, it was over. I was exhausted for another 10 days but on the mend.

“I was fortunate that COVID-19 affected me much less than so many others, and equally fortunate that Apellis held its own. Our employees remained safe and resilient and did an extraordinary job of ensuring the safety of our patients in our clinical trials.”

The virus was top of mind for Colorado executives as early as March, when more than 30 leaders of technology companies based along the Front Range — including Foundry Group partners Brad Feld and Seth Levine, Techstars CEO David Brown and Sphero CEO Paul Berberian  — launched a drive to have employees work remotely to prevent the spread of COVID-19.

However a company handles virus outbreaks at or near the top, an Evergreen-based doctor who spent five weeks on a ventilator and nearly died is warning all who will listen that COVID-19 is nothing to mess with.

Anesthesiologist and avid outdoorsman Dr. Michael Leonard, 68, told KCNC-TV Channel 4, “I would say to anybody, “Do not take this lightly. It can change or end your life.”

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